Local News

Motorized scooters frequently part of Medicare fraud cases

Posted September 2, 2009 3:17 p.m. EDT
Updated September 2, 2009 6:53 p.m. EDT

— Wheelchairs and motorized scooters have become big business in the world of Medicare fraud.

Four Raleigh residents have been charged with pocketing more than $12 million since 2007 from false Medicare claims for motorized scooters, powered wheelchairs and other medical equipment.

Government investigators have pursued similar cases nationwide. In July, for example, federal agents arrested people in Houston, New York, Boston and Louisiana on fraud charges linked to scooters.

"This is not new. It goes on across the country every day," said Stephanie Bias, coordinator of the Medicare fraud-prevention program in the state Department of Insurance. "There are people who've seen this as an opportunity to make money by stealing someone's health care identity."

The U.S. Department of Health and Human Service's Office of the Inspector General reported in May that more than 10 percent of the $920 million Medicare paid in 2005 for powered wheelchairs had been misspent.

The four people charged in the Raleigh case would recruit and train salespeople to establish relationships with Medicare patients for obtaining their Medicare numbers and personal information, according to federal investigators.

The group was often reimbursed for scooters that patients never received, a federal indictment states.

Eight business names were registered with the state by the four defendants in the case, including five that were listed at an address on Oak Park Road, off Glenwood Avenue in northwest Raleigh.

Defendant Kalu Kalu, for example, is listed with state officials as operating non-profits under the names Marriage Defense Fund and Support Africa. He also had a business in the early 1990s to "export goods overseas."

Kalu and his wife, Kecia Kalu, each face 16 counts of health care fraud and one count of conspiracy to commit health care fraud in the case.

Investigators allege that the couple used the Medicare provider number of co-defendant Martin Ifeani Iroegbu to submit bogus claims for scooters. The Kalus also are alleged to have used their Raleigh businesses, Enuda Healthsource and Universal Medical Supplies, to bill Medicare for health care aids that were never provided to beneficiaries.

Iroegbu has already pleaded guilty to health care fraud and aiding and abetting. He is expected to begin serving a 26-month prison sentence in November.

His neighbor, Steve Cohen, said Wednesday that he never could have imagined such problems for the quiet man who lives next door.

"He wasn't around that much, and whenever we saw him, he was usually talking on his cell phone," Cohen said.

Kalu Kalu is scheduled to be arraigned Sept. 8. Kecia Kalu is scheduled for arraignment on Sept. 28. Both are on pre-trial release.

The fourth defendant in the case is Nnenna K. Cornett, who operates States Medical Products LLC in Raleigh. She faces 16 counts of health care fraud and one count of conspiracy to commit fraud, but it's unclear whether she has been arrested.

Bias said the Raleigh case demonstrates that seniors should report any questionable billing on their Medicare statements.

"Report anything suspicious, no matter how small, even if it doesn't pan out," she said.

To report Medicare fraud, call the state Department of Insurance weekdays at 800-443-9354.